Former transportation chief dishes free advice to Divvy operator

Since resigning as Chicago transportation commissioner, Gabe Klein is trying to launch his own firm while doling out free advice to other companies, including Alta Bicycle Share Inc., which won a $65 million contract with the city during his tenure.

“I give free advice to a whole lot of different companies, to be honest,” said Mr. Klein, who stepped down in November. “I am not getting paid by Alta or any of the other startups that I'm advising.”

In March 2012, the Emanuel administration gave Alta Bicycle a 15-year bike-rental contract.

Mr. Klein's role as unpaid adviser underscores the close relationship between the Portland, Ore.-based company and two former high-ranking Chicago transportation officials. Scott Kubly, who until last month was the department's managing deputy commissioner, has a contract with Alta to help develop new business.

City employees who take positions with a company that has city business must follow restrictions imposed by an ethics ordinance passed last year and executive orders issued by Mayor Rahm Emanuel.

Mr. Klein said he spends 80 percent of his time on his new firm, which he said will combine his expertise in car and bicycle sharing, bus rapid transit and planning. Before coming to Chicago, Mr. Klein was director of the transportation department for the District of Columbia, where in 2010 Alta also won a contract to run bike-sharing.

LOSING BIDDERS PROTESTED

In Chicago, Alta's selection prompted two losing bidders to file formal protests, claiming the choice was tainted in part by Mr. Klein's work as a consultant to Alta before joining the Emanuel administration. The city's inspector general also conducted a probe.

The protests were ultimately rejected and the contact was awarded. The status of the inspector general probe could not be determined.

The Emanuel administration, Mr. Klein and Alta executives have denied any impropriety. The administration contends the contact was awarded by the Chicago City Council, not the administration.

Mr. Klein declined to say how he has advised Alta but is unapologetic about his relationship with the firm, calling himself a “friend of the company.”

“I don't think there are any prohibitions against advice,” he said.

Despite the controversy over Alta, Mr. Klein has generally developed a national reputation for his expertise in urban transportation. He has been named a senior visiting fellow at the Urban Land Institute, a Washington-based nonprofit that focuses on planning. The appointment lasts through June.

'GAME-CHANGER'

“Gabe is a game-changer whose innovative ideas about transportation planning have upended long-held notions about how people get around in cities,” ULI Chief Executive Patrick Phillips said in a statement.

In an email, Mia Birk, a vice president and principal in Alta Bicycle, said Mr. Klein “is not currently employed by or under any paid consulting relationship with Alta.”

“Mr. Kubly is under contract to Alta Bicycle Share, advising on new business development,” she added, declining to answer further questions.

Mr. Klein also said he is “working on forming partnerships” for his new company, but he declined to say whether Alta is one of the 10 companies he has contacted.